BMC: FUNDAMENTAL STRENGTH VS. EXTREME OVERBUYING. IS IT TIME TO INVEST OR CORRECT?

 

The Colombian Mercantile Exchange (BMC) has shown positive performance and remarkable growth in the last period, with an annual increase in the share price of approximately 130.77%. Historically, it reached its highest value in July 2015, when the share price hit COP 4,995, and its all-time low was in August 2012 at COP 530, demonstrating significant stock market development.

Regarding its economic and financial performance, the BMC reported outstanding growth in 2015 with a 70% increase in net income, rising from COP 17.617 billion to COP 29.881 billion in the third quarter. Operating revenues also grew by 36% compared to 2014, reaching COP 93.241 billion. Furthermore, EBITDA grew by 72%, reaching COP 50.991 billion, while the net margin stood at 32% and the return on equity (ROE) was 44%, well above the 29% of the previous year, demonstrating financial strength and attractive profitability for investors.

Key financial indicators such as the high ROE and the sustained increase in revenues and operating profit are encouraging signs for attracting investment. The company has shown its ability to adapt and grow in a favorable economic environment, supported by Innovation and financial services diversify its revenue streams and strengthen its market position.

For future projections, recent performance indicates a promising scenario for investors. The Colombian Mercantile Exchange (BMC) is on track to consolidate sustainable growth, with robust financial fundamentals and positive trends in its operating results. The probability of growth is high if it maintains this momentum, supported by its key role in the Colombian financial market and the country's economic development.

This analysis suggests that the BMC represents an attractive investment opportunity, backed by favorable financial indicators, sustained economic growth, and a positive historical track record. Investors may find it appealing, although detailed analysis and continuous monitoring of external economic and regulatory factors are always recommended.

The information found in various sources includes price charts, trend lines, descriptive statistics, probability measures, and a histogram, which we will use to evaluate the BMC's current situation.

The BMC's stock time series chart shows marked volatility and a general upward trend, especially toward the end of the period The analyzed data shows that the price reached a maximum of 5000. The initial price was 2650. Comparing linear and polynomial correlations, it can be established that the 6th-order polynomial correlation (88.40%) best fits the data, confirming that the BMC price evolution is not linear but cyclical, exhibiting multiple inflection points. The high R² value in the polynomial models (>80%) indicates the strong explanatory power of the complex historical trend, while the low linear correlation underscores that long-term projections using only a straight line would be highly inaccurate.

The mean (1329.31), median (909.00), and mode (1610.00) show a significant difference, confirming a skew or distortion in the distribution. The positive skewness indicates that the distribution is skewed to the right, meaning the right tail is longer and there are more extreme values ​​(high prices) that pull the mean upward, away from the median and mode. In an investment context, this can suggest that there have been exceptional gains (high outliers) that inflate the average.

In investment risk management, kurtosis is crucial because it indicates the probability of extreme events (outliers).

High kurtosis (>3, leptokurtic) indicates a higher probability of both very large losses and very large gains. This is associated with high tail risk (risk of rare events). Low kurtosis (<3, platykurtic) indicates a lower probability of extreme events compared to a normal distribution. The data is more dispersed in the tails.

In this case, a kurtosis of 2.12 suggests that BMC returns, although volatile (high standard deviation), have a lower concentration of extreme events (large price jumps) than if they behaved in a perfectly normal manner. This is important for the risk model because Value at Risk (VaR) models that assume normality could overestimate tail risk for this specific asset.

The histogram visually corroborates the positive skewness (right skew) indicated by the skewness statistic calculation.

Most of the frequency (the mode, class 532-1532) is concentrated in the lower price classes (left), and the frequency decreases progressively towards the right, forming a long tail towards the higher price values ​​(5000), confirming that the price distribution is not a Gaussian bell curve (normal distribution), which would be symmetrical with The highest frequency is in the center (Mean = Median = Mode).

Most historical price observations fall within the lower range, but high values ​​(5000) have occurred frequently enough to strongly influence the mean, as seen in the skewness analysis.

The statistical and econometric analysis reveals the following key points: high volatility and an upward trend, with a high standard deviation and a very high correlation (88.40%) for the 6th-order polynomial model, capturing the current strong upward trend that drove the price to the 5000 peak. The average monthly return of 0.35% is positive. The distribution is not normal, the positive skew indicates the influence of historically high prices, and the low kurtosis suggests a lower risk of extreme tail events compared to a normal asset.

The 90-day forecast of 1809.71 is well below the current closing price (assuming 2929 is the last closing price in the table), implying that the statistical model, influenced by historically low prices, projects a short-term correction or decline from the highs.

Therefore, this is not the optimal time to invest in BMC based solely on this data.

The investment would be made near the all-time high (5000), and statistical analysis projects a significant correction in the next 90 days (forecast of 1809.71). Buying at the high and waiting for a drop is not a prudent strategy.

The current high price implies a greater risk of mean reversion, which the 90-day forecast suggests.

It is prudent to wait for a price correction toward the forecast level (1809.71) or near the historical average (1329.31) before considering a purchase, or to revise the forecasting model using more advanced time series techniques that better incorporate the recent trend, such as ARIMA.

The integration of market indicators and oscillators, along with moving averages, reveals a picture of extreme euphoria and overbought conditions, which intensifies the cautionary signal given by the previous statistical analysis.

Technical indicators show a generally neutral situation, but the details reveal a high concentration of overbought signals. It's important to note that oscillators measure the speed and overbought/oversold condition of the price.

The RSI (14) = 87.281 (Oversebought), showing that a value above 70 indicates that the asset is Overbought. A value of 87,281 is extremely high, suggesting that the price has risen too quickly and is vulnerable to a correction.

The Stochastic Oscillator, defined as STOCH(9.6) = 100, indicates overbought conditions, as it is at its maximum level (100), a very strong signal that the price is at the upper end of its recent range. Similarly, the Williams Stochastic Oscillator %R = 0 indicates overbought conditions; a value of 0 indicates that the closing price is at or near the high of its recent trading range. Most of the key velocity and momentum oscillators (RSI, STOCH, Williams %R) are showing signs of overbought conditions. This reinforces the statistical forecast that anticipates a correction. The current upward momentum has exhausted much of its short-term potential.

On the other hand, moving averages (MAs) are used to identify the dominant trend and support/resistance levels. The summary is Buy, which contradicts the overbought signals.

The short-term moving averages (5 and 10 days) signal a sell (or caution) because the current price is already well above these averages, suggesting overstretching. If the current price is 5000 (as indicated by the 5 and 10-day MAs), these averages are acting like a "rubber band" that could pull the price down.

The long-term MAs (50, 100, and 200-day MAs) signal a buy because the current BMC price (possibly 5000) is well above these averages. This confirms that the underlying trend is strongly bullish. The 200-day MA at 3100.20 would be key support in the event of a severe correction.

There is a dichotomy. The underlying trend is undeniably bullish (long-term moving averages), but the recent move is overheated (short-term moving averages). The market is in a momentary bubble within a major upward trend.

The observation that a cumulative probability p of 88.68% has been reached is crucial, meaning that the current price or historically reached prices These prices are higher than 88.68% of all prices observed in the data distribution.

In other words, the stock is at the 88.68th percentile, very close to the upper end of the distribution, confirming the cautionary or alert position, as the room for the price to rise without correction is statistically limited. This is strong confirmation of the reversal risk.

The high risk of a short-term correction, indicated by the statistical forecast and the overbought alerts from the oscillators (RSI, STOCH, Williams %R), is the dominant signal. Although BMC is a "good stock" with a strong underlying uptrend and solid fundamentals (as suggested by the Revenue, EPS, and 7.1% Dividend data), the current price reflects unsustainable short-term euphoria.

The investment recommendation is to not buy at this time. The risk level is too high, as the probability of a correction far outweighs the potential for immediate profit. It's best to wait for the correction, monitor the stock, and look for an entry point (buy) at a significant support level. The levels suggested by the 200-day moving average (approximately 3100) or the statistical forecast (approximately 1809) could be better re-entry points after the market recovers from overbought conditions.

If you already hold a position, now is an opportune time to consider taking partial profits due to the extreme overbought condition.

References (APA style):

• Colombian Mercantile Exchange. (2025). Third Quarter 2025 Financial Report. Retrieved from https://www.larepublica.co/finanzas/bolsa-mercantil-de-colombia-alcanzo-crecimiento-de-70-en-utilidades-a-septiembre-4264241

• Colombian Mercantile Exchange. (2025). Historical Evolution and Price of the BMC Stock. Retrieved from https://es.tradingview.com/symbols/BVC-BMC/

• Colombian Mercantile Exchange. (2024). Innovation and Technology at the Colombian Mercantile Exchange. Retrieved from http://www.bolsamercantil.com.co/innovacion/tecnolog%C3%ADa/BMC/Mintic